IS THE CLOUD SOLUTION READY FOR LIFE INSURANCE?

The
potential of cloud computing is currently a hot topic of debate in Vietnam now.
A lot of the discussions about cloud computing tends to focus on its ability to
reduce IT costs. However, this is only one part of the cloud benefits. Cloud
computing allows companies to access IT-based services, including
infrastructure-as-a-service (IaaS), software-as-a-service (SaaS),
platform-as-a-service (PaaS) and business processes, via the Internet. Cloud
technologies allow IT to improve IT efficiency and better respond to the
changing needs of the business, create new services and open new markets,
thereby helping to achieve high performance.

Currently,
most of insurers prefer on premise hosting solution, which has a lot of
disadvantages as follows:

·  You
have to pay a fixed amount in upfront for software license and hardware and
cannot downsize for cost saving if your demand changes.

·   You
have to wait for IT to complete all the infrastructure, integration setup, then
implement your solutions

·    Your
IT team has to do all administration works to address maintenance and support
issues.

Therefore,
cloud hosting is an option for you to take advantage of the mobility, and
scalability and flexibility. Currently, there are three forms of clouds:
private, public and hybrid. Private cloud is built within a company’s data
center and is designed to provision and distribute virtual application,
infrastructure and communications services for internal business users. In
Vietnam Life Insurance industry, Manulife built their private clouds since
2011, which are located in Hong Kong and Malaysia (Malaysia is disaster
recovery site) so all Manulife Asia countries are sharing resources of their
private cloud. In contrast, public cloud extend the data center’s capabilities
by enabling the provision of IT services from third-party providers over a
network. However, most of companies are worried about risk and data security
while considering public cloud. At the end, the hybrid cloud has been more
popular now, it can also consist of two public clouds provided by different
providers or even a combination of a cloud and traditional IT infrastructure.
The hybrid cloud also has some disadvantages such as the manageability of
different cloud services because every service provider will have its own
management and provisioning environment; and network connectivity, especially
if remote cloud services like a public cloud or a hosted private cloud are
involved (it is not only must bandwidth, reliability and relevant cost
considerations be taken into account, but also the logical network topology
must be carefully designed).

For
example, you want to use hybrid cloud for your application, but you still want
to keep database at your own IT infrastructure. In this case, the main
challenge is the performance of the exchange of data between the different
services and applications, then you have to invest on the high bandwidth of
internet connection to improve the performance. In case, you want to use
different cloud services, the biggest challenge is the integration of the
different cloud services and technologies. However, the standardized APIs will
help you solve this challenge.

Manulife
is also using public and hybrid cloud for their customer portal, CRM –
Salesforce, Office 365 and Workday. Prudential is using cloud for Office 365
and Workday systems. As CIO of Vietinbank Aviva, I feel more comfortable about
putting our non-critical systems into public, private and hybrid clouds such as
Portal, BI, Office 365, Workday, CRM, Web conferencing, Network and server
monitoring and administration, etc. And we will start to concern moving
critical systems to hybrid clouds when the security and audit maters are not
our concern. Moreover, private cloud is also in our plans to leverage the IT
infrastructure, improve IT efficiency and save cost for Aviva in Asia.

So what
are key benefits of cloud computing for insurance industry?

·   Reduce
total costs of IT infrastructure and operations as little or no requirement for
capital investment to enable usage

·   Pay-as-you
go pricing model) and lower ongoing operating costs than IT owned and managed
in-house.

·   Better
respond to the changing needs of the business, create new services and open new
markets, thereby helping to achieve high performance

·   Support
integration of third party systems

·   Force
a move to a service-oriented model and new innovation in systems design

·   Maximize
renewals by customers

·   Unify
customer data, enabling customer-centricity. It offers major opportunities for
insurers to build a more flexible, nimble and customer-centric business model
that can drive profitable growth and help us achieve high performance in the
industry

·   Drive
new business and engage customers more effectively through new distribution
models

So,
what does the future of cloud solution look like for insurers, both in the
short and long term? In the next few years, I believe that the insurers who
move more quickly to embrace the cloud will gain a competitive lead that others
may struggle to match. In order to do that, we have to understand the condition
and scope of our entire IT infrastructure and apply cloud solution for
non-critical systems first, then step by step for critical systems; identify
stakeholders should be engaged in making decisions for cloud; define clearly
criteria and requirement for selecting cloud providers.

Phan
Hoai Nam – CIO Vietinbank Aviva Life Insurance.